GST Tribunal Shocks AMB Cinemas

The Goods and Services Tax Appellate Tribunal (GSTAT) has ruled that AMB Cinemas LLP, owned by superstar Mahesh Babu, failed to pass on the benefit of reduced GST rates to moviegoers. The tribunal directed the multiplex to deposit ₹1.1 crore into the Central and State Consumer Welfare Funds. It also issued similar directions to five other theatres in Telangana, taking the total amount to nearly ₹1.7 crore.

According to the tribunal, although GST rates on movie tickets were reduced from January 1, 2019, the theatres kept ticket prices almost unchanged by increasing the base ticket price instead of passing the tax benefit to consumers. GSTAT held that this violated the anti-profiteering provisions under Section 171 of the CGST Act. The tribunal rejected AMB Cinemas' argument that higher operating costs and state approvals justified the pricing. It also directed some theatres to pay 18% interest, while no penalties were imposed as the violations occurred before January 1, 2020.